Can I Get My Car Back from Repossession?

Repossession?

            YES!   If you were late on payments and a creditor repossessed your car, then in most cases a bankruptcy filing will prevent them from selling or retaining the car.   A Chapter 13 bankruptcy will effectively re-set the debt and allow you to pay the trustee each month who will in turn pay off the car debt.   A Chapter 7 bankruptcy can also stop the repossession, but in order to retain the car long term, a client must become current and stay current in a chapter 7 bankruptcy.

            In certain situations, a car will NOT be returned.  The most common situation is when the car is subject to a Title Pawn instead of a traditional car loan.   Title pawn “loans” are not loans at all and you are not required to repay them.  (This is how they can legally charge 100% interest; because you only pay it if you choose to.)  So, when the title pawn car is repossessed, it already belongs to the creditor, and a bankruptcy will not get it back.  Although sometimes it can, I recommend an attorney consultation.

            Another troubling situation is when you have filed repeat bankruptcies.   Each time you file, the power of the case decreases.  A third case (within one year) carries no bankruptcy stay, and the creditor does not have to return a car; indeed a creditor is even able to go to your home and repossess a car after a third case is filed.

            At the Slomka Law Firm, we help clients evaluate what options are best for them when their car is in jeopardy or has already been repossessed.  In every case, you have more options when you still have the car, so it is best to act quickly and not in response to the loss of the car.  

Can I Keep My Car In Bankruptcy?

Can I Keep My Car In Bankruptcy?

Cars can be kept in all forms of bankruptcy, but it takes careful planning and legal advice to accomplish this. If your car is already repossessed, then we can get it back, but we must act quickly. In most cases, there is a strict ten-day deadline to file a bankruptcy: after that, you may not be able to regain your car.

If you still have possession of your car, then we can sometimes use the benefits of a Chapter 13 bankruptcy to lower your monthly payments. We do this through three ways: First, in certain cases we are able to lower your debt from the higher balance owed down to the lower fair market value of the car. This so-called “cram down” is a huge benefit of Chapter 13 bankruptcy. Secondly, we can lower your interest rate. And finally, we can stretch your remaining payments over a longer term to further reduce the monthly cost to you. Chapter 13 cases are complex and always require careful legal advice before and during the case.

In a Chapter 7 case, you can keep the car, but you must continue to make car payments. The main advantage here is the if you choose to walk away from the car, either now or at any time in the future, you may do so, without the fear of a large deficiency or a subsequent collection lawsuit.

Cars and bankruptcies are complex. At the Slomka Law Firm we can help you make the right choices for your unique situation.